Top-Ranked Web Startups Don’t Get the Most Funding, Says Founder of Sampa

7/10/08Follow @gthuang

Earlier this week I saw Marcelo Calbucci’s monthly “Seattle Startup Index” on his blog, Seattle 2.0, and I was a bit puzzled. There are 299 local websites on his list, ranked using Alexa and Compete—services that estimate Web traffic numbers by extrapolating from the browsing behavior of users of Alexa and Compete’s toolbars. The top five sites were Zillow, iLike, BuddyTV, I Can Has Cheezburger? (I still have no idea what this site is about), and Wetpaint. But what do the rankings actually mean?

I wanted to hear it from the horse’s mouth, so yesterday I sat down with Calbucci, who has been intimately involved with the startup community since 2005. That’s when he left Microsoft after seven years (four-plus with MSN Search) to start up Sampa, a Redmond-based family-networking site for which he is chief technology officer. In March, Sampa revamped its site and landed $1 million in angel investment.

Calbucci described how he arrived at his startup rankings, which he does in his spare time. It all started in 2006 when John Cook of the Seattle P-I put out a list of 60-odd local Web startups. Calbucci took the list and started ranking the sites (using Alexa and Compete) and looking for more of them. He blogged about them and asked people to send him info about their companies. Pretty soon he was up to 100 Web companies. Towards the end of 2007, he started adding other local startups in software, hardware, and wireless—and that’s where the rankings become more difficult to interpret, and sometimes controversial. “Every once in a while I get emails calling the list ‘useless,’” he says.

The thing to remember, Calbucci says, is that the rankings measure the popularity and “reach” of startups’ websites—and even then it’s only an estimate based on certain users, not an unbiased survey of the number of unique addresses of visitors, for instance. What’s more, tech companies whose main business is not driven by their websites will not rank high. So, successful firms like Seattle-based Pelago, creator of the popular mobile social-networking service Whrrl, ranks only 76th, and Mercer Island-based Napera Networks, which does hardware for network security, is way down at #237.

The biggest surprise to Calbucci? “You’d think the ranking might correlate with funding level, but it doesn’t,” he says. Some highly-ranked sites, such as 43 Things (at #6) run by the Robot Co-op, have raised little or no money from venture capitalists or angel investors, yet are getting a lot of traffic. With these caveats in mind, I think Calbucci’s list is a very useful resource for people who want to keep up with the innovation community.

Our chat touched on some other interesting topics as well. A few highlights:

—On running a local tech blog: “My goal is to make the community more dynamic,” he says. “In 2005 when I started Sampa, there were basically no local blogs about startups.” He launched Seattle 2.0 in March 2007. “The first three months were very slow. Then it started growing and growing. The last six months have been very good [in terms of traffic].”

—On Sampa (named after his hometown of São Paulo, Brazil) and entrepreneurship: “My long-term dream is that everyone will have a Sampa website. Just like email, in 10 years everyone will have a website. I hope it’s Sampa… The challenge now is marketing, getting it into people’s minds and creating a brand.”

—On Microsoft and Yahoo’s recent battles: “I don’t think a deal will happen… It wasn’t that Yahoo turned down the bid, it was that they pooh-poohed the offer and made it sound like being owned by Microsoft would be the most evil, evil thing,” he says. “Yahoo might be bought in a few years, maybe by Fox… Microsoft has so much money, they can afford to be incompetent for a decade… but then they won’t be able to buy customers and traffic.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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